In an interview with inbusiness.kz, Gulnara Musataeva, the head of the bank, explained how the bank builds long-term relationships with its partners and why the bank's credit products give them an advantage in growing their business.
In Kazakhstan, the loan portfolio of banks continues to grow despite high inflation, which restrains business activity.
The high base rate affects the funding costs for banks. However, this does not reduce the appetite for borrowed funds, as the corporate segment and SME sector find it difficult to maintain growth dynamics without financial support, let alone increase activity. Under these conditions, Nurbank JSC is meeting halfway by focusing on lending.
How does the bank build long-term relationships with its clients and why do the bank's credit products help build bridges? How high is the credit demand in the corporate sector now, and why does Nurbank stand out with its product line? Gulnara Musataeva, the chairman of the bank's management board, explained to inbusiness.kz.
— At the beginning of September, President Kassym-Jomart Tokayev addressed the issue of insufficient corporate lending in his message to the people of Kazakhstan. Why do you think this problem still remains relevant?
— As of early October this year, Nurbank's corporate loan portfolio amounts to 175.7 billion tenge. The share of corporate lending in the loan portfolio is 57%. The numbers clearly demonstrate that we specialize in financing large projects. However, the criticism of the head of state is not without basis. Traditionally, retail lending is more profitable for second-tier banks due to higher rates for individuals, which allows for greater margins. Clients in the corporate sector need long-term and affordable funding. Typically, investment projects require long-term loans, up to 10 years, with loan amounts reaching several billion tenge.
It should be noted that the current subsidy programs of the Damu Entrepreneurship Development Fund are limited to 3 billion tenge per borrower, while the average loan amount for a corporate client is 5–6 billion tenge, making the Damu program not accessible to all. Moreover, the process of lending to corporate sector clients is always quite complex, requiring the bank to thoroughly study the project, conduct financial analysis, assess risks, and sometimes involve external experts. It is also worth noting that due to the current base rate, funding itself is not cheap for second-tier banks.
— What large projects and in what sectors of the economy is Nurbank currently financing?
— To date, Nurbank is financing large business entities in the following economic sectors: food and beverage production, construction, provision of communication services, mining, and processing. Negotiations are currently underway with the Development Bank of Kazakhstan JSC regarding possible funding for further financing of large business entities.
— As you mentioned the negotiations with the Development Bank of Kazakhstan (DBK), could you please clarify which state programs implemented to support large businesses is Nurbank a participant in?
— Since 2014, Nurbank has been participating in the financing program for large business entities and finances large enterprises with funds received from DBK. Companies financed by Nurbank also participate in the programs of the Damu Fund, the State Institution "Department of Agriculture", and the Ministry of Agriculture to obtain subsidies.
— Why do corporate clients choose Nurbank?
— Today, Nurbank is a stable financial institution. Our main competitive advantage is an individual approach. For us, it is not just a beautiful term. We truly offer the client the most suitable conditions for cooperation and together find optimal ways for convenient servicing of the loan. Our priority tasks are to be in dialogue with the client, meet their needs, and keep up with the times. We adhere to a balanced and conservative approach to risk assessment, so we will never dump rates in the market. We select and subsequently finance the highest quality projects, thereby contributing to the development of the country's economy. Nurbank's focus is on building long-term relationships and developing the client's business.
— Let's talk about your role in supporting and developing small and medium-sized businesses (SME) in Kazakhstan. Could you describe the structure of the loan portfolio in the SME sector? Which industries in this segment does Nurbank most often finance?
— As of early October, with the current figures, our bank's SME loan portfolio is 88.4 billion tenge. In other words, as of October 1 of this year, the SME sector accounts for 29% of the loan portfolio, and it is well diversified across industries. However, a large portion consists of loans to enterprises in the service sector, trade, agriculture, food production, construction. We are pleased that the majority of the SME loan portfolio is directed towards investment purposes. In other words, when choosing us, entrepreneurs start creating new businesses.
— Could you describe the SME lending programs available at your bank?
— Our product line for SME clients currently fully meets market requirements. Nurbank offers a wide range of products with competitive rates and conditions, where each client can tailor the conditions that best suit themselves and their business. We actively lend to SMEs within the framework of state programs implemented by the Damu Fund. We are pleased to be participants in this program, helping the government effectively deliver credit resources to the final recipients.
We would especially like to highlight the "Business Onay" credit product. The purpose of the loan is to replenish working capital, investment purposes, and refinancing loans obtained from other second-tier banks. For example, for investment purposes, such a loan can be arranged for a period of up to 60 months, and for working capital replenishment—up to 36 months.
For individual entrepreneurs and farms with significant turnovers, the universal product "SME Business" will be of interest. Such a loan can be arranged to replenish working capital, purchase and reconstruct fixed assets, and for investment purposes.
Recently, the bank launched a new product for SME clients—a collateral-free loan of up to 7 million tenge. Based on our experience, loans up to 7 million tenge are most in demand among small business representatives. A collateral-free loan under the "Business Onay" bank product can be arranged by individual entrepreneurs to cover temporary cash gaps and replenish working capital for a short period. The main advantages are minimal requirements for the client, a simplified document package, and quick processing times.
— Which SME support areas are prioritized? Could you say that when selecting a project, Nurbank focuses on the most relevant and beneficial initiatives for society?
— Financing women's entrepreneurship, startups, and projects in the "green economy" sector is a priority for the bank. Nurbank also focuses on financing educational projects: private schools, kindergartens, educational and development centers.
Currently, Nurbank strives to actively finance women engaged in small and medium-sized businesses. Today in our country, the share of women among the owners of micro, small, and medium enterprises exceeds 43%. Therefore, the impact of women's entrepreneurship on the economy is hard to overestimate. An important tool for achieving success and developing a business for women entrepreneurs in small and medium enterprises is lending. Credit provides the opportunity to purchase equipment, purchase goods, or rent premises. It helps not only to start a business but also to expand it by increasing production or launching new products.
Statistics show that women are very disciplined in fulfilling their loan obligations and are interested in building long-term partnership relations with the bank. The average age of a businesswoman borrowing from the bank is 48 years old, and the average loan size is about 40 million tenge. Beginner businesswomen take loans to open kindergartens, beauty salons, organize the production of semi-finished products, clothing sewing, printing, cooking, etc.
Yes, we do not yet have special programs for women's entrepreneurship. But, at the moment, such a special loan product is being developed. I would like to note that Nurbank has extensive experience, for example, in financing projects related to "green" technologies. Within the framework of this product, a bank client can obtain financing for the implementation and development of "green economy" projects related to the efficient use of existing natural resources, reducing the negative impact on the environment, improving energy efficiency, energy saving, mitigating climate change impacts, and adapting to climate change. Essentially, almost everything related to "green projects." We plan to develop a thematic lending program using a similar principle specifically dedicated to women's entrepreneurship.
— Gulnara Abaevna, you mentioned financing startups. Is Nurbank keen on lending to startups?
— We lend to startup businesses, provided there is adequate collateral coverage, continuous operational activities for at least the last 12 months, and if one of the following conditions is met: in case of restructuring an existing organization, if an existing organization plans to undertake a new type of activity, or if the organization requesting financing is affiliated with existing organizations.
Source: https://inbusiness.kz/ru/news/seo-nurbanka-my-delaem-stavku-na-razvitie-biznesa-nashih-klientov